Tesla invests $1.5bn in Bitcoin and can accept cryptocurrency as payment

Tesla, the world's biggest electric vehicle business, said it'll soon accept Bitcoin while payment for its electric cars and has got invested $1.5 billion in the largest cryptocurrency.

The California-based company updated its investment policy last month to diversify assets and maximise its returns on cash holdings, it said in a statement to the US Securities and Exchange Commission on Monday.

Within the different policy, Tesla aims to invest some of its profit alternative assets including digital assets, gold bullion and precious metal exchange-traded funds.

"We invested $1.5bn in Bitcoin in this policy and may acquire and carry digital assets every once in awhile or long-term," Tesla said.

"We expect to commence accepting Bitcoin as a type of repayment for our products in the near future, at the mercy of applicable laws and primarily on a restricted basis, which we might or might not exactly liquidate upon receipt."

Prices for the digital asset surged 15.35 % to $43,750 at 7.29pm UAE time after the news. Market analysts happen to be bullish and anticipate Bitcoin to feel the $65,000 mark.

Tesla’s investment on Bitcoin shows "this is a currency and it could be accepted for repayment", argued Naeem Aslam, chief market analyst at brokerage Avatrade, adding, "There is little or nothing which will [stop] Bitcoin from soaring now. Another stop is 50K and we are moving towards the 65K."

"Bitcoin is heading towards the sky, another billionaire has got turn out and he has put his funds where his mouth area is … traders have already been looking forward to Elon Musk to create some big news and today the proof has gone out," he added.

In December, Nouriel Roubini, professor of economics at New York University's Stern University of Business and one of crypto's fiercest critics, said Bitcoin "does not have any fundamental value."

"Calling them cryptocurrencies is a misnomer ... to become a currency it must be a device of accounts, a scalable method of payment and a stable store of worth," he explained on Bloomberg TV.

"On most of these counts neither Bitcoin or perhaps any different cryptocurrency is a currency," Mr Roubini said. "Second, there is plenty of academic evidence suggesting that the price tag on Bitcoin possesses been manipulated ... and it generally does not have any intrinsic worth."

In the SEC submitting, Tesla also acknowledged the concerns linked to the trading of cryptocurrencies.

Without centralised issuers, digital assets are at the mercy of security breaches, cyber attacks, along with human errors or computer malfunctions that may cause the loss of individual keys had a need to access such assets, the business said.

"While we intend to have all reasonable steps to secure any digital resources … if such threats happen to be realised or the measures or handles we create to secure our digital resources fail, it could cause a partial or total misappropriation or lack of our digital property, and our financial state and operating results could be harmed," the business said. Tesla's inventory was up 0.26 % at $852.23 per talk about on Monday.

Tesla, which temporarily suspended businesses in each of its developing facilities in the first 50 percent of 2020, said its business could be influenced by "macroeconomic conditions" caused by the Covid-19 pandemic.

“We cannot predict the duration or perhaps direction of current global developments ... the sustained impact which is basically unknown.”

“If current global industry conditions continue or worsen, or if we can not maintain businesses at a scope that's commensurate with such circumstances ... our business, prospects, fiscal condition and operating outcomes could be harmed,” it added.

The company said it could also experience future delays in launching or ramping production of new vehicles and other products.

Tesla, which joined the S&P 500 index in December, delivered near 500,000 cars globally last year. It aims to improve its production to more than 750,000 products this year.

Previous month, Tesla reported a 157 per cent annual surge in 4th quarter net profit to $270 million in the trunk of increased demand because of its electric vehicles.